3: Perception and Individual Decision Making

3-1Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall

Essentials of Organizational Behavior,

10/e

Stephen P. Robbins & Timothy A. JudgeChapter 3

Perception and Individual Decision

Making

3-2Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall

After studying this chapter, you should be

able to:1. Define perception and explain the factors that

influence it.2. Identify the shortcuts individuals use in making

judgments about others.3. Explain the link between perception and

decision making.4. List and explain the common decision biases or

errors.5. Contrast the three ethical decision criteria.6. Define creativity and discuss the three-

component model of creativity.

3-3Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall

Perception

A process by which individuals organize and interpret their sensory

impressions in order to give meaning to their

environment.The world as it is perceived is the world that is behaviorally

important.

3-4Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall

Factors Influencing Perception

3-5Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall

Person Perception: Attribution Theory

Suggests that perceivers try to “attribute” the observed behavior to a type of cause:

Internal – behavior is believed to be under the personal control of the individual

External –the person is forced into the behavior by outside events/causes

3-6Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall

Determinants of Attribution

Distinctiveness – whether an individual displays different behaviors in different situations (the uniqueness of the act)

Consensus – does everyone who faces a similar situation respond in the same way as the individual did

Consistency – does the person respond the same way over time

3-7Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall

Determination of Attribution

3-8Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall

Attribution Errors

• Fundamental Attribution Error The tendency to underestimate the influence of external factors and overestimate that of internal factors.

• Self-Serving Bias Occurs when individuals overestimate their own

(internal) influence on successes and overestimate the external influences on their failures.

3-9Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall

Shortcuts Used in Judging Others

• Selective Perception – a perceptual filtering process based on interests, background, and attitude. May allow observers to draw unwarranted conclusions from an ambiguous situation.

• Halo Effect – drawing a general impression based on a single characteristic.

• Contrast Effects – our reaction is influenced by others we have recently encountered (the context of the observation).

• Stereotyping – judging someone on the basis of the perception of the group to which they belong.

3-10Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall

The Link Between Perception and Decision Making

Decision making occurs as a reaction to a perceived problem

•Perception influences: Awareness that a problem exists The interpretation and evaluation of

information Bias of analysis and conclusions

3-11Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall

Rational Decision-Making Model

1. Define the problem.2. Identify the decision criteria.3. Allocate weights to the criteria.4. Develop the alternatives.5. Evaluate the alternatives.6. Select the best alternative.

Seldom actually used: more of a goal than a practical method

3-12Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall

Assumptions of the Model• Complete knowledge of the

situation• All relevant options are known in

an unbiased manner• The decision-maker seeks the

highest utility

3-13Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall

Bounded RationalityThe limited information-processing capability of human beings makes it impossible to assimilate and understand all the information necessary to

optimizeSo people seek solutions that are satisfactory and sufficient, rather than optimal (they “satisfice”)Bounded rationality is constructing simplified

models that extract the essential features from problems without capturing all their complexity

3-14Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall

Decision Making in Bounded Rationality

Simpler than rational decision making, composed of three steps:

1. Limited search for criteria and alternatives – familiar criteria and easily found alternatives

2. Limited review of alternatives – focus alternatives, similar to those already in effect

3. Satisficing – selecting the first alternative that is “good enough”

3-15Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall

Intuitive Decision Making

• An non-conscious process created out of distilled experience

• Increases with experience• Can be a powerful

complement to rational analysis in decision making

3-16Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall

Common Biases and Errors

• Overconfidence BiasAs managers and employees become more

knowledgeable about an issue, the less likely they are to display overconfidence

• Anchoring BiasA tendency to fixate on initial information and fail to

adequately adjust for subsequent information• Confirmation BiasSeeking out information that reaffirms our past

choices and discounting information that contradicts past judgments

3-17Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall

Common Biases and Errors

• Availability Bias The tendency to base judgments on information that

is readily available• Escalation of Commitment Staying with a decision even when there is clear

evidence that it is wrong• Hindsight Bias The tendency to believe falsely that we could have

accurately predicted the outcome of an event after that outcome is already known

3-18Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall

Organizational Constraints on Decision

Making• Performance evaluations• Reward systems• Formal regulations• Self-imposed time constraints• Historical precedents

3-19Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall

Ethical Frameworks for Decision Making

Utilitarian Provide the greatest good

for the greatest numberRights

make decisions consistent with fundamental liberties and privileges

Justice impose and enforce rules

fairly and impartially so that there is equal distribution of benefits and costs

3-20Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall

Creativity in Decision Making

The ability to produce novel and useful ideas

•Helps people to: Better understand the problem See problems others can’t see Identify all viable alternatives Identify alternatives that aren’t

readily apparent

3-21Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall

Three-Component Model of Creativity

3-22Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall

Global Implications

Attributions: Cross-cultural differences exist – especially in

collectivist traditionsDecision Making:

Cultural background of the decision maker can have significant influence on decisions made

Ethics: No global ethical standards exist Need organizational-level guidance

3-23Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall

Implications for Managers

Perception: To increase productivity, influence workers’

perceptions of their jobs

To improve decision making:1. Analyze the situation2. Adjust your decision approach3. Be aware of biases and minimize their impact4. Combine rational analysis with intuition5. Try to enhance your creativity

3-24Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall

Keep in Mind…1. People have inherent biases in

perception and decision making• Understanding those biases allows for

better prediction of behavior2. Biases can be helpful

• Managers must determine when the bias may be counterproductive

3. Creativity aids in decision making• Helps to appraise, understand, and

identify problems

3-25Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall

Summary

1. Defined perception and explained the factors that influence it.

2. Identified the shortcuts individuals use in making judgments about others.

3. Explained the link between perception and decision-making.

4. Listed and explained the common decision biases or errors.

5. Contrasted the three ethical decision criteria.6. Defined creativity and discussed the three-

component model of creativity.

3-26Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall

All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or

transmitted, in any form or by any means, electronic, mechanical, photocopying, recording,

or otherwise, without the prior written permission of the publisher. Printed in the United

States of America.